TAXI TIPPING: New research shows taxi passengers less likely to tip when using card payment over cash
- Perry Richardson
- 13 minutes ago
- 3 min read
Taxi drivers are missing out on tips as fewer people carry cash, according to new research into tipping habits across the UK.
A study of 2,000 adults found that 58 per cent still prefer to tip using notes or coins, compared to just 15 per cent who opt for card. Worryingly for cab drivers, 80 per cent of people have skipped tipping altogether when the only option was digital.
Taxis are the second most common place Brits say they leave a tip, with the average amount sitting at £3.90. But the rise in card-only payments means drivers could be missing out as passengers either avoid tipping or tip less.
Concerns over where card-based tips end up are part of the problem. Almost half of those surveyed worry the money doesn’t go directly to the person who provided the service. Others said handing over cash feels more personal and gives them more control over the amount.
The move away from physical money is having a wider impact too. One in six admit they tip less in general due to the decline of cash. And a quarter say the cost-of-living pressures are reducing how often they leave a gratuity.
More than half feel awkward when presented with preset tip amounts on card readers, with 60 per cent saying they keep cash on them specifically for tipping.
However, taxis are the second most common place Brits say they leave a tip, with the average amount sitting at £3.90. Only restaurants rank higher, with 74 per cent of respondents saying they usually tip when dining out, followed by taxis (42 per cent) and hairdressers (31 per cent). One in five also admit they have tipped more than usual to try and impress someone.
But the rise in card-only payments means drivers could be missing out, as passengers either avoid tipping or tip less. Concerns over where card-based tips end up are part of the problem. Almost half of those surveyed worry the money doesn’t go directly to the person who provided the service. Others said handing over cash feels more personal and gives them more control over the amount.
Post Office Banking Director Ross Borkett, who commissioned the research, said digital payments may be widespread, but cash still plays a crucial role when it comes to tipping. He highlighted the reassurance people feel when handing money directly to service workers like taxi drivers.
Borkett said: “Digital payments are a fundamental part of modern life – except when it comes to tipping.
“Our research shows that for so many people, handing over a coin or a note feels more personal than using a card, and gives reassurance that their tip goes directly to the person they intend it for. This cash connection simply cannot be replicated with a card payment.
“The data also shows a third of people are more likely to leave a tip at Christmas. As people head out for festive gatherings in the months ahead, cash remains a simple, trusted and meaningful way to say thank you – and at Post Office we’re proud to help people stay connected by providing free cash withdrawals and deposits across our branches.”
Clinical psychologist Dr Catherine Wilkholm added that giving and receiving cash tips can have a positive psychological effect for both sides. She said physical tipping creates a stronger emotional connection than electronic payments.
Dr Wilkholm said: “As humans we are wired to seek social validation and have a core need to feel seen and appreciated by others.
“Receiving a tip reinforces a sense of competence and being valued, experiences which over time strengthen self-esteem and confidence.
“Giving a tip can activate the brain’s reward circuitry, giving the tipper a mood boost that psychologists call the ‘helper’s high’ and can also increase feelings of social connection and trust.
"When we physically hand money to someone, it feels real and meaningful, activating a neurological response such as releasing dopamine and a psychological response like a feeling of connection.
“Handing over cash is tangible, social and sensory - it activates more of a neurological response than card tipping and can enhance the psychological rewards.”
